Data Center As A Service Market Size, Share & Trends Analysis Report By Infrastructure (Servers, Storage, Networking), By Organization Size (SMEs, Large Enterprises), By Vertical, By Region, And Segment Forecasts, 2023 - 2030

Market Size & Trends

The global data center as a service market size was evaluated at USD 71.92 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 25.1% from 2023 to 2030. The key players in the market are involved in transforming their traditional data centers into modern and advanced data centers using technologies such as cloud, AI, machine learning, and IoT. For instance, Larsen & Toubro and Microsoft India announced a strategic partnership to empower customers with infrastructure and cloud computing services. L&T and Microsoft planned to work together to cater to the large customers base in India by developing roadmaps and architectures to modernize their traditional data centers into technologically advanced data centers to enable organizations to achieve their digital transformation is expected to drive the demand for data centers as a service market growth.

Governments across the world are easing policy regulations and promoting investments in data center facilities. For instance, the Ministry of Electronics and Information Technology of India announced key strategic decisions framed by the Indian government to support data centers in the country, such as Simplify clearances for setting up data centers in India, pre-provisioned data center parks in states with necessary infrastructure availability, and a defined policy framework from different states and cities, along with the formulation of Data Centre Incentivization Scheme (DCIS), which is expected to specify the intended beneficiaries, fiscal and non-fiscal incentives, and applicability criteria for the sector.

Data centers offer industries with higher levels of control over their internal data and help in utilizing the stored data in highly effective ways, such as using advanced technologies such as machine learning, AI, IoT, and advanced analytics to improve their capabilities to assist customers. For instance, IBM and Bharti Airtel, a communications solutions provider in India, announced a strategic partnership for deploying Airtel's edge computing platform, which included the deployment of 120 network data centers in 20 cities across the country. The large platform was designed to help large enterprises across different industries, including manufacturing and automotive, leverage innovative solutions that delivered enhanced value to their clients and business operations. Such initiatives are expected to drive the growth of the market over the forecast period.

The key players such as IBM; Microsoft; Amazon technologies, Inc.; Equinix, Inc.; and Alibaba are making large investments in developing large data center facilities across the world. For instance, Equinix, Inc. offers massive data storage facilities through its xScale data centers. The company announced a partnership with GIC, a Singapore-based sovereign wealth fund provider, to strengthen its xScale data center portfolio by announcing the development of 32 hyperscale data centers, including a total of nineteen xScale data centers in Europe, six in Asia Pacific, four in North America, and three other data centers to be deployed across the world. Thus, the growing demand for hyperscale data centers is expected to drive the market growth over the forecast period.

Organization Size Insights

The large organization segment accounted for a market share of 57.9% in 2022. Favorable government regulations to encourage the establishment of data centers and the aggressive investments being made by large companies in hosting private data centers are expected to open new opportunities for the growth of the segment. For instance, in March 2022, Macquarie Telecom Group launched its data center at Macquarie Park Data Centre Campus in the North Zone of Sydney, Australia are the key factors driving the data center as a service demand in the following segment.

The SMEs segment is expected to expand at the highest CAGR of 27.3% during the forecast period. Preferring a third-party data center over on-site IT infrastructure and outsourcing IT infrastructure management allows SMEs to save significantly on their capital expenditures. Government initiatives to promote digitization are prompting SMEs, especially in developing economies, to opt for data center services, which bodes well for the growth of the segment. For instance, Atal Incubation and Digital India, among other initiatives being pursued by the government of India are expected to prompt SMEs in the country to opt for market.

Vertical Insights

The IT & Telecom segment accounted for the largest market share of 23.7% in 2022. Telecommunications companies are particularly managing their infrastructure needs by establishing their own data centers using a private cloud for both core and non-core networking operations. Telecommunications companies are also partnering with data center providers to expand their business portfolio. For instance, in November 2021, Telenor partnered with Google Cloud to digitally transform its incumbent infrastructure by integrating AI and ML to enhance its technical capabilities are the key factors expected to drive the demand for data center as a service market in the following segment.

The healthcare segment is anticipated to expand at a CAGR of 30.5% during the forecast period. Aggressive development of AI-powered diagnostics tools, telemedicine solutions, and Internet of Medical Things (IoMT), is expected to create robust opportunities for data center solution providers. Hybrid multi-cloud practices are becoming more popular in the healthcare industry vertical to isolate certain workloads from the public domain, especially to ensure adequate data security and privacy protection when it comes to sensitive patient health information.

Infrastructure Insights

The servers segment accounted for the largest market share of 59.1% in 2022. Academic institutions, defense agencies, and government agencies are aggressively adopting new, innovative solutions based on the latest digital technologies, such as artificial intelligence (AI), internet of things (IoT), and machine learning (ML), thereby driving the need for sophisticated, hyper-converged IT infrastructure comprising high-performance computing servers to run complex software-defined solutions and process large volumes of data. The strong emphasis on maintaining a pool of servers to ensure adequate processing power to process large volumes of data bodes well for the growth of the segment over the forecast period.

The storage segment is anticipated to expand at a CAGR of 28.0% during the forecast period. the rising volumes of computing data across the globe are also driving the demand for storage systems to ensure quick access to the desired data. Several countries are focusing on establishing their own virtual data storage systems to reduce their reliance on overseas organizations and strengthen data security. Infrastructure software enables the digital storage system to control, monitor, secure, and manage data without incurring any excessive operational costs are the primary factors expected to drive the data center as a service market demand.

Regional Insights

North America dominated the market and accounted for revenue share of 35.9% in 2022. In North America, data center facilities are progressively expanding in line with the continued advances in the latest technologies, such as big data and the Internet of Things (IoT). These technologies require advanced facilities to store, process, and manage large volumes of data. Furthermore, the presence of key data center service providers in the region, such as Amazon Web Services, Inc.; Microsoft Corporation; IBM Corporation; and Alphabet Inc., is a major factor driving the market growth in North America.

Asia Pacific is anticipated to expand as the fastest developing regional market at a CAGR of 30.2%. The demand for data center is rising due to the growing development and infrastructure projects in the Asia Pacific region. Further, the higher volume of dat a generated by large e-commerce customer base, extensive telecom networks, and greater demand from industry players in the region to manage higher traffic flows in servers. For instance, in February 2021, Linode LLC announced its plan to expand its services for its faster-growing customer base in APAC by adding a new GPU instance to its data center facility in Singapore. The new capability offers low-latency features for near-real-time data analysis, image processing, AI, video transcoding, and other data and processing applications. Furthermore, the growing number of startups and SMEs in the region is expected to fuel the adoption of the data center as a service in the region. 

Key Companies & Market Share Insights

To broaden product offering, industry companies utilize a variety of inorganic growth tactics, such as partnerships, regular mergers, and acquisitions. In March 2022, Microsoft Corporation announced its plan to establish a new Hyderabad data center region, along with its existing three data center regions in India, in Mumbai, Pune, and Chennai, with the intent to offer a broad portfolio of data solutions, cloud, AI, productivity tools, and advanced data security. Some of the prominent players dominating the global data center as a service market include:

• IBM Corporation

• Microsoft Corporation

• Hewlett Packard Enterprise Development LP

• Dell Inc.

• Alibaba

• AT & T

• Cloudian

• 365 Data Centers

• Digital Reality

• Cyxtera Technologies.

• Digital Ocean, LLC.

• Linode LLC.

• Equinix, Inc.

• Huawei

• Amazon.com, Inc.

Data Center As A Service Market Report Scope

Global Data Center As A Service Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global data center as a service market based on infrastructure, organization size, vertical, and region:

• Infrastructure Outlook (Revenue, USD Billion, 2018 - 2030)

  • Servers

  • Storage

  • Networking

• Organization Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • SMEs

  • Large Enterprises

• Vertical Outlook (Revenue, USD Billion, 2018 - 2030)

  • Retail

  • BFSI

  • IT & Telecom

  • Healthcare

  • Manufacturing

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa

    • U.A.E

    • Saudi Arabia

    • South Africa